Great legal ventures = LegalX@MaRS

There is a math concept in Lean Six Sigma that goes a little something like this:

Y = f(X)

That is, Y is a function of X.

It’s all about cause and effect, and about measuring improvement. The Y is the effect, or the place you’re trying to get to that shows improvement. The possible X variations come from how you get there.

For every Y, there are many possible variations of X. In fact, it’s all about the X. Which X will bring you to a great Y? Which X is the input that is going to lead to the desired output of Y? Which defect X is the root cause of your unsatisfactory Y?

If Y is a healthy body, the X of pizza, beer and donuts will not get you there. Trust us. We tested that one. In fact, the X of pizza, beer and donuts will lead to a bloated, lethargic and unsatisfied Y. You need a better X, such as kale, spinach and goji berries, to achieve that Y. Now your Y is thinking straight, feeling well and producing value.

Fantastically wellI am certainly not fine by farBut you could sayI’m close to spectacular

Here’s what we’ve discovered throughout our deep and broad travels within the legal industry over the past 18 months: From the perspective of a vertical in and of itself, legal services have been in a fantastically unwell state of Y for quite some time. There is nobody left saying that traditional or status quo legal services are satisfactory for either the providers or the end users.

We’ve also learned that we actually like conferences, so we host them from time to time. What we don’t like are gripe sessions and the “Ain’t it awful?” club. Know Y? Not getting it done? What if there are some really great Xs that need to be cobbled together to create a super Y?

For example, we’ve met some really interesting legal tech entrepreneurs, like our friend Cian O’Sullivan over at Beagle. His company’s software analyzes contracts and presents key information in a clear and interactive way through highly sophisticated machine learning and artificial intelligence. You have to see it in action to understand its beauty and the potential it has to save small- and medium-size enterprises thousands of dollars in legal fees per use case.

We also really like Syngrafii, a company based in Toronto and founded by Margaret Atwood. Yes, as everyone asks, the Margaret Atwood. Syngrafii is more than just an e-signature solution, as it also offers wet signaturemetadata capture on digital paper. For large companies, imagine what this capability could do for compliance. For small companies, it offers a solution for creating binding agreements in a low-cost fashion. Essentially, the technology maintains a record of all of the relevant document execution details and effectively defends against all non-repudiation concerns, even where there is a wet ink requirement.

Syngrafii has been around for 10 years, but is just finding a legal market now, as it was previously focused on the financial technology sector and the legal sector wasn’t yet ripe. It’s ripe now, though. The technology is amazing—and in the way the word “amazing” is meant to be used. Not as in: “This cherry gum is amazing!” As in: “The iPhone is amazing.” Check out this video about Syngrafii on the Norton Rose Fulbright website to learn more.

What is the X that will get Beagle and Syngrafii to their ideal Y? They need more clients, distribution partners and perhaps even markets—both geographical and operational. They could also use capital.

We built LegalX to mesh all of those things together because, you know, even a 10-year-old company can still be about to hit its ideal product-market fit. Just ask the folks at Logikcull, a cloud-based electronic discovery platform that was recently featured in Forbes magazine for raising a $4-million seed round.

Big global firms aren’t interested in this stuff, right? They like things the way they are. They dig the status quo.

Um… not so much.

Have you seen what Dentons is doing with the launch of NextLaw Labs? According to Dan Jansen, CEO of NextLaw: “We are looking for startups, entrepreneurs, VCs, established vendors—anyone who wants to join our innovation ecosystem and work together to build and bring to market new products and services, whether through direct investments in existing companies or by building our own suite of services within NextLaw Labs.”

And, by the way, we’re having spectacular conversations with global BigLaw firms that are genuinely interested in pursuing unprecedented actions in the marketplace to drive new offerings—and not just to their own clients, but also to other legal providers. This is so refreshing and beyond the usual startup programs, which are really just door-crasher specials and loss-leaders from firms that aren’t actually committed to helping startups to grow, scale and become fantastically well.

Law schools that are stuck in the Socratic paper chase with no semblance of market relevance or forward thinking might want to reconsider their methods, as well. Ever hear of Stanford? It’s a legendary breeding ground for startups and entrepreneurs. Silicon Valley giants including Google, Yahoo and Cisco Systems all came out of the Palo Alto, California institution’s computer science and engineering departments. In the past couple of years, Stanford’s law school has become a hotbed of entrepreneurship in the field of legal technology through the Stanford Center for Legal Informatics, also known as CodeX. (Great name, by the way.)

Imagine Xs like theirs working collaboratively with MaRS’ LegalX. Similar relationships will be explored by Georgetown University Law Center, purveyors of the superb Iron Tech Lawyer competition, and our good friends at Michigan State University College of Law, which is the originator of ReInvent Law Laboratory and is now also the part-time home of our friend Ken Grady, the great #LegalLean evangelist.

Ever hear of a legal hackathon? They’re springing up all over the place and another good friend, Dan Lear of Seattle, is one of the chief evangelists through the Seattle Legal Tech hacker group.

Do we know exactly which X to utilize? Um, no. That’s what makes it a function that needs to be solved. We all need to make smart guesses, undertake analysis, test hypotheses and bring together the absolutely best ingredients.

Do you know what else is involved with X? The unknown. Mathematicians and great lean practitioners know that they don’t know the right answer, but they stay involved in the question rather than run away from it. For success in the new legal world, you need to be comfortable with the feeling of being in the unknown, while also having faith in what you do know.

MaRS is a place, but it is also an ecosystem. It is both a physical and digital hub—a truly global innovation centre that eclipses the capacities of any accelerator. It brings innovation to market for both startups and corporate intrapreneurs. MaRS connects capital, product development expertise, market research, contacts, customers, talent and access to new markets. What has each of those X factors created in terms of a formidable Y? World-class ventures. In fact, MaRS ventures have raised $1 billion in the past three years.

On an annual basis, MaRS hosts hundreds of events that draw thousands of attendees. We have also welcomed 1,000 international delegations. One thousand! That’s right, MaRS is aimed at global outreach. The likes of Al Gore and Richard Branson have passed through MaRS’ halls in the past few months.

MaRS’ focuses have typically been cleantech, health and the information & communications technology sector, which has now created a legal cluster—and not a moment too soon. It’s time for an entrepreneurial class to drive economic disruption to the legal vertical. It’s not just lawyers who get entry into the sandbox. Technologists, designers, developers, engineers and savvy business people (with no legal background) who like to push boundaries—as well as lawyers—are all necessary players in driving change.

The number of legal startups and legal technology applications out there has gone from a trickle to a stream. An era of experimentation in the mode of the build-measure-learn loop is upon us, along with angel and venture capitalists. It’s no surprise, given the $800-billion global market opportunity.

That is precisely what we are after with LegalX at MaRS, a cluster dedicated to driving the legal sector forward through enterprises—whether startup or established corporations—and law firms.

With LegalX, we’re creating a previously unimagined sandbox, with the aspiration to be:

Fantastically wellWe are certainly not fine by farBut you could sayWe will be close to spectacular

Aron was the Innovation Lead for the LegalX cluster and Senior Advisor for education technology at MaRS. See more…

Jason Moyse

Jason Moyse has served on global teams implementing major customer experience initiatives as a connector/doer/spark and key trusted advisor to the C-Suite, Senior Leadership and Governance Teams for legal and business matters. See more…